PacWest, Western Alliance help regional bank stocks notch gains
Reuters
Published May 18, 2023 06:33AM ET
Updated May 18, 2023 05:40PM ET
(Reuters) - U.S. regional bank stocks edged higher on Thursday, rallying from earlier session losses, as market expectations that the sector is moving past its troubles continue to buoy trading.
The KBW Regional Banking Index edged up 0.07%. The index had jumped 7.2% on Wednesday, recording its biggest percentage gain in nearly two years, following a disclosure by Western Alliance (NYSE:WAL) earlier this week that its deposits grew by more than $2 billion.
Western Alliance rose 1.1%, erasing earlier losses. The Phoenix-based lender had surged 10% on Wednesday.
PacWest Bancorp climbed 5%, rebounding from early trading declines on Thursday. The stock has lost about 75% so far this year. Zions Bancorporation (NASDAQ:ZION) also rallied 4.1%, while First Horizon (NYSE:FHN) rose 1.48%.
"The group has been under unrelenting pressure as shorts have built up massive positions, betting that another shoe could drop. It would not take much good news to see a strong short squeeze," Arthur Hogan, chief market strategist at B.Riley Wealth, wrote in a note to investors.
U.S. Senator Elizabeth Warren is questioning federal bank regulators on their decision to sell First Republic Bank (OTC:FRCB) to the nation's largest bank, JP Morgan Chase (NYSE:JPM). JP Morgan had agreed to pay $10.6 billion to acquire First Republic earlier this month.
In a letter sent to the Office of the Comptroller of the Currency and Federal Deposit Insurance Corporation Wednesday, Warren said the deal was "deeply troubling," and sought details on how the agencies decided to arrange that particular sale, allowing JPM to grow even larger.
(This story has been refiled to add Art Hogan's company name in paragraph 5)
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Written By: Reuters
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